By Mwangi Githathu for IOL
Forget about Black Friday – this year we will be in for a bleak Christmas as the tills won’t be ringing with the same vigour due to the worst unemployment rate, highest number of business closures and worst retail spend in years, according to economists, retail analysts and trade unions.
Efficient Group chief economist Dawie Roodt said: “It’s no big surprise. This is going to be the worst Christmas ever. Many people will not be spending money as they usually would, because there is absolutely no money and there is not much we can do about it.
“There will be changes in consumption patterns and perhaps one of the things government can do to help out is put politics aside and cancel some of the public holidays because people need to get back to work.”
Economist Mike Schussler agreed, but was still banking on Black Friday as a money spinner.
“Yes, it will be the worst Christmas in recent years. We must simply do everything to get back to normal. Black Friday has become the best promotional day on SA shopping calender. So whether people buy Coke or cellphones it is needed by all,” said Schussler.
“Retailers need people shopping. We still have 14 million people employed. While that is too few, we need to get back to normal as soon as possible.”
Investment analyst at Anchor Capital Casey Delport said: “All in all, it does appear that South Africans at large are due for a bleak Christmas season ahead.
“With 2.2 million jobs lost in Q2, it will take some time for unemployed South Africans to find their way back into the formal labour market, if they ever do.
“Currently, the FNB/Bureau of Economic Research Consumer Confidence Index sits at -23 for Q3 and bar the second quarter low of -33, this is the lowest on record since the first quarter of 1993 which was a recessionary period of great uncertainty just before South Africa’s first democratic election.”
Federation of Unions of SA (Fedusa) acting general secretary Riefdah Ajam said: “As a result of the hard lockdown and consequent hardships from retrenchments, few workers will receive bonuses. However we know that consumer spending is the only way to get the economy going again and so we encourage it.”
Political economy analyst Daniel Silke said: “As long as there is no Covid-19 second wave, I think we will see some rebound in retail as we move closer to Christmas.
“Lockdown regulations affected us and there is pent-up demand for value-based splurges. Of course spending will be far below last year, but not as dramatically poor as some might have expected.”
Asked whether this year’s Black Friday sales should be cancelled, spokesperson for online retailer OneDayOnly Matthew Leighton said: “Despite 2020 being a very tough year for almost everyone, there’s nothing to be gained from not recognising Black Friday and the festive season at large.
“Now more than ever, the economy requires stimulation and regrowth. Black Friday is the biggest opportunity afforded to the e-commerce industry for us to contribute towards that economic stimulation,” said Leighton.
National Credit Regulator chief executive Nomsa Motshegare said: “If consumers did not plan and budget for Black Friday and the festive season, they are cautioned not to use credit.”
National Clothing Retail Federation of SA executive director Michael Lawrence said: “We know that if you want the economy to recover, retail functionality is key so all retailers, not just clothing, will be doing smart plugging to encourage spending without incurring unsustainable debt.”
National president of South African Informal Traders Alliance SAITA Rosheda Muller said: “The informal trade has many concerns about the upcoming festive season, and we are meeting the Department of Economic Development next week to discuss them.”
“We are especially worried about the night markets, as our traders really depend on that for extra income. After having suffered severe losses during Covid-19, we need some clear direction on what the City of Cape Town’s plans are to assist us and our customers to have a good festive season.”